Tuesday, 8 January 2013

Poverty of CSR

"Though multinational firms in the mining industry have been preaching elaborate Corporate Social Responsibility (CSR) programmes, some of these initiatives are cosmetic and fail to satisfy the local communities. Mining firms, by any measure, make super profits and are capable of contributing more to the national Treasury as well as to the communities in which they operate.....Zambia should craft a tax regime that will be able to capture sufficient revenue from the mining firms without stifling production and profit levels. The country’s poverty levels can go down if the tax regime was worked out to seal all loop-holes that give rise to evasion...The country is richly endowed with mineral resources and holds about six per cent of the world’s known copper reserves..... But it is sad that the majority of citizens particularly those in the countryside live in abject poverty to the extent that some families are surviving on about $1 a day..."

- Times of Zambia

It was good to pick up the seems people are finally waking up to the arguments we have advanced time and time again. CSR is a bribe that no serious patriot should ever rely on to satisfy our country. The idea of sorting out Zambia Revenue Authority is also a pipe dream because globally multinationals always avoid profit based taxes. Zambia is not unique.

This matter boils down to bribes & corruption.The Zambian govt(cabinet &MPs) have been bought off by Multnational firms. The town in Switzerland where the chairman of Glencoe lives collects more tax revenue from his earnings from Zambian mines than the Zambian govt gets from Glencoe, how can this make any sense??Zambia might as well be another Liberia or Congo except the violence is death by pollution of air and water instead of guns .

By the way who has information about the Copperbelt Development Foundation ? Who knows its accounts ?

Its main objectives are to promote the social development, relieve poverty and contribute to the provision of health, education and other social services in the Copperbelt Province and Mumbwa District of the Central Province of Zambia. The CDF holds 71,5% stake in ZCI (Bermudan company).

Thomas Kamwendo is the chairman of the CDF and also chairman of ZCI. His presidency is an economic disaster : 28,4% KCM sold for a song ($213 million) to Vedanta in 2008 (now value over $1 billion), dramatic take-over of African Copper (despite of high copper price) while he was a very competent director of KCM/Vedanta.

In 2010, the CDF got at least $30,000,000 from the sale of ZCI stocks. Have Copperbelt People benefited from this money ??

ZCI has nothing to do with the Zambian govt. It is a private investment vehicle registered in South Africa and Bermuda. Actually Kamwendo got more for his shareholders compared to ZCCM when he sold 28.4% of KCM shares to Vedanta for $213m. It is ZCCM that sold 51% of its shares to Vedanta for $54m.

Franck, you mix all ! The entry of Vedanta in KCM in 2004 and the call option (28,4% ZCI)

ZCI and ZCCM chose Vedanta as partner in KCM BECAUSE Vedanta had technical expertise, and may ensure the financial stability of KCM.That because, in November 2004, Vedanta acquired 51% of KCM for only US$48million. This same 51% of KCM were estimated US$1,321m in December 2005 by Morgan Stanley !!

ZCCM-IH still owns 20,6% KCM and the CDF still onws 71,5% ZCI.

The only question is : Have Copperbelt People benefited from this money ??

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